Guidelines for Establishing a Scholarship
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Document Number: ADV--103pr
Revision #: 2.0
Document Owner: University Provost
Date Last Updated: 12/17/2017
Primary Author: VP for Advancement
Status: Approved
Date Originally Created: 02/13/2012
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General Description
Description / Scope: Information about establishing a scholarship.
When Performed: As needed
Responsibilities: Advancement
Process Steps or Stages
1. Guidelines for Establishing a Scholarship
What happens:
Creating a scholarship is one way you can assist students and leave a legacy at Cumberland University. It's also a very meaningful way to honor family and friends.
The following are the steps taken to establish a scholarship at Cumberland University.
1.1 Step 1: Determine Type of Scholarship Fund
What happens:
The first step is to determine whether you would like to establish an "endowed" scholarship or an "annual" scholarship:
Endowed Scholarships
•Endowed scholarship funds are designed to be permanent and perpetual and can be created with gifts totaling a minimum amount of $25,000, contributed in full at the outset or with an initial commitment that is added to over time until the endowment level of $25,000 is attained.
•The contributions will be added to the Cumberland University pooled investment fund and will share on a pro-rata basis in the earnings from the investment of the funds. The principal of the fund is invested to produce income, and an annual award is made to a student/s.
•Typically, the university receives an approximate 5% rate of return on investments. For example, a $25,000 fully-funded endowed scholarship will typically earn approximately $1,500 each year which can then be made available for scholarships. Please note that this is only an example to assist you with your decision in establishing a scholarship at Cumberland University.
•The principal remains untouched, so the endowment can last into perpetuity.
Annual Scholarships
•Annual scholarships can be established with an outright gift of $1,000.
•Unlike an endowed scholarship described above, an annual scholarship is not a permanent fund and is awarded only as long you (or others) choose to contribute to the fund.
1.2 Step 2: Establish Scholarship Criteria
What happens:
As a scholarship donor, you choose the name of the scholarship as well as the criteria. The Office of Advancement is available to help you create the criteria for your scholarship. Endowed and annual scholarships at Cumberland University are awarded to deserving students based upon area of field of study, merit, financial need, academic achievement, and/or other criteria. The university must agree to any special award conditions established by the donor. The university will draft the criteria according to your specifications and present it to you for your approval.
1.3 Step 3: Administration of Scholarship Funds
What happens:
The University Selection Committee carefully reviews the scholarship applications submitted by students and selects the most deserving recipient(s) based on the donor-established criteria. Major contributors of a scholarship fund are notified annually of the recipient(s) as well as the amount of the award. Recipient(s) write a thank-you note to the donor.
2. Tax Benefits of Funding a Scholarship
What happens:
An outright gift in the form of cash or appreciated securities will allow you to receive immediate tax benefits in the year you make the gift to Cumberland University. In the case of appreciated securities, you may also avoid capital gains taxes.
You can also provide for your scholarship in your estate plans. Estate gifts are an easy way to establish a scholarship without affecting your current income or assets.
3. Frequently Asked Questions
What happens:
1. How are university scholarships named and how is the selection criteria established? The major benefactor of a scholarship establishes the scholarship name. You can establish a scholarship in your own name or choose to name it for a friend, family member, or a favorite faculty member. You also aid in establishing the criteria by expressing your intentions for the award. The university will draft the criteria according to your specifications and present it to you for your approval.
2. How are university scholarships awarded? Scholarships for current students are advertised on the Cumberland University website and applications are collected by the Office of Financial Services. Typically, a selection committee carefully reviews each application and selects the most deserving recipient(s) based on the established criteria.
3. Will I receive notification when a student is awarded the scholarship? You will be notified annually of the scholarship recipient(s). You will be informed of the name and hometown of the recipient, as well as the amount of the award and status of the fund.
4. For More Information
Cumberland University
One Cumberland Square
Lebanon, TN 37087
Telephone: (615) 547-1239
Fax: (615) 443-1806
Email:
www.cumberland.edu/alumni
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Subject Experts
The following may be consulted for additional information.
VP for Advancement
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Regulations
This document pertains to the following regulations:
University governance